Maharashtra tops in bogus firm detection, none in Nagaland—Govt. data

DIMAPUR — During the sustained drive against non-existent taxpayers by Goods and Services Tax (GST) formation, which began in May 2023, no bogus firms involved in suspected input tax credit (ITC) were detected in Nagaland, according to the Ministry of Finance.

It said that in order to curb fraud in the GST and increase compliance, the GST formations under the Central Board of Indirect Taxes and Customs (CBIC) and the state and union territory governments across the country are conducting a focused drive on the issue of non-existent and bogus registrations. It also includes the issuance of fake invoices without any underlying supply of goods and services.

According to the Ministry, since the start of the special drive against fake registration in May 2023, a total of 29,273 bogus firms involved in suspected ITC evasion totaling INR 44,015 crore have been detected, with 121 arrests made so far.

It mentioned that the government has taken various steps to strengthen the GST registration process, and pilot projects of biometric-based Aadhar authentication at the time of registration have been launched in Gujarat, Puducherry, and Andhra Pradesh.

Furthermore, the government has endeavoured to curtail tax evasion through measures such as sequential filing of GST returns, system-generated intimation for reconciliation of the gap in tax liability in GSTR-1 and GSTR-3B returns, and the gap between ITC available under GSTR-2B and ITC availed under GSTR-3B returns, as well as the use of data analytics and risk parameters for the detection of fake ITC, it added.

According to the ministry’s data, Maharashtra state has the highest number of bogus firms detected, with a total of 926 detected and an amount of INR 2,201 crore tax evasion suspected, with 11 arrests made. Also, 54 lakh fake firms were registered in the state.

Meanwhile, in Delhi, 483 bogus firms were detected, with a total of INR 3028 crore in suspected tax evasion; 61 lakh bogus firms were registered; and 11 arrests were made in 2023.

Among the Northeastern states, along with Nagaland, no cases were also detected in Manipur and Mizoram. In the region, the highest number of 19 bogus firms were detected in Assam with suspected tax evasion of INR 116 crore. The IT Department was able to block or recover INR 67 crore. Assam had eight fake firms detected per lakh registered companies.

In Tripura, nine bogus companies were found with INR 20 crore of suspected tax evasion. The action led to the detection of 29 fake firms per lakh registered in the state. Sikkim saw two bogus companies identified with INR 2 crore of tax evasion. The IT Department blocked or recovered INR 2 crore and the state had 18 fake firms per lakh.

While no bogus firms were detected in Meghalaya, INR 5 crore of suspected tax evasion was detected in the state. Arunachal Pradesh, too, had no bogus companies but suspected tax evasion of INR 13 crore was flagged and INR 14 crore was blocked or recovered.

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